Life License Qualification Program (LLQP) Practice Exam

Which of the following is true about Group Life policies conversion privileges?

1. Must be completed within 6 months

2. Can only be converted if the employer pays

3. Can be converted to individual policy based on age

4. Requires evidence of insurability

The correct answer is: Can be converted to individual policy based on age

Conversion privileges under Group Life policies allow individuals to transition their group coverage into an individual policy when they leave a group plan, often due to job separation or retirement. The correct assertion regarding this conversion is that it can be converted to an individual policy based on age. This means that when converting to an individual policy, the individual’s age plays a significant role in determining the premiums and the benefits available under the new policy. Insurers often factor in age because it directly correlates with the risk associated with insuring an individual, which influences underwriting and pricing. While the other options touch on relevant aspects of conversion privileges, they do not accurately represent the fundamental nature of the conversion process. For instance, conversion does not necessarily have to be completed within a strict six-month window for all policies, as specifics can vary among insurers. It is also not contingent solely on employer payments, as the individual typically takes on responsibility for the new policy. Lastly, evidence of insurability may not be required when converting from a group plan, particularly if the conversion is performed within a certain time frame; group members are often permitted to convert without having to prove insurability, which distinguishes it from other individual applications.